Sunday, 22�July, 2012

$30 billion?

Sounds realistic

enough

Export target realistic,

linked to development

initiatives: ACCI

ISLAMABAD

Online

The Attock Chamber of Commerce and In-dustry (ACCI) said business community willhelp government realise export targetsunder the new three-year Strategic TradePolicy Framework 2012-2015. Export targetof $30 billion is realistic, the private sectorcan help government achieve the goal whichwill require workable development initia-tives backed by enabling social, political andinvestment environment, it said. Businesscommunity is awaiting new trade policy andpinning high hopes on newly-appointedSecretary Commerce Munir Qureshi who isconsidered a business friendly official, saidPresident ACCI Tariq Mehmood,. He saidthat national business leaders includingCACCI VP Tariq Sayeed, VP Saarc CCIIftikhar Ali Malik, FPCCI President HajiGhulam Kadir Khan Sherani and othershave assured all out assistance and coopera-tion to the government functionaries in re-alising the entire objectives providedenabling environment is guaranteed. TariqMehmood said that first three-year tradepolicy framework which is to end in nextnine days failed to achieve goals due to en-ergy crisis, want to business friendly tax-system, capacity building and certificationissues, export subsidies and lack of interestby finance ministry to provide funds tocommerce ministry.

Guess who

borrowed Rs.51b in

6 days from SBPKARACHI

inP

The government has borrowed rs51 billionin six days from the State Bank of Pakistan.The central bank has issued new statistics ofborrowings of the government, according towhich the government has borrowed rs51billion only in 6 days in the current fiscalyear. This means that the government isborrowing rs8.5 billion per day from theState Bank. According to the statistics, thegovernment borrowed rs44.72 billion toover come budget deficit. The provincialgovernments had a loan of rs3.54 billionwhile rs6.39 billion were borrowed for thepurchase of commodities. The year endingon June 30, the government was in debt ofrs1200 billion to the central bank.

SITE is low on gasKARACHI

nni

SITE Association of Industry Chairman Mr.M Irfan Moton has expressed much concernon low gas pressure in SITE Area by the SuiSouthern Gas Company Limited. About 25-30 percent of industrial units have gone outof production in the SITE industrial area dueto anomalous gas pressure, industrialists arecomplaining of low gas pressure for last twodays. He said in a press statement that the in-dustrial production stopped yesterday aftergas pressure dropped abruptly, several cap-tive power generating units also stopped op-erating because of the non sufficient supply ofgas to the biggest and oldest industrial area ofthe country. He further said that this problemis being faced only by the industrialists ofSITE Area whereas the other industrial areasof Karachi do not face this problem whichmeans that discriminatory attitude is beingmade by SSGCL with SITE Area and thisissue should be addressed by the authorities.

MOSCOW

AGenCieS

PrESIDENT Vladimir Putin onSaturday signed the bill rati-fying russia's entry to theWorld Trade Organization

after 18 years of often acrimonious ne-gotiations, the Kremlin press office said.Economists have long argued that rus-sia needed to join the WTO as it was theonly major economy outside the body --following China's membership in 2001 -- and the government hopes accessionwill stimulate growth.

The measure making russia the156th WTO member will become lawwithin 30 days, after the lower house ofparliament, the State Duma, approved it

on July 10 and the upper house, the Fed-eration Council, on Wednesday.

But the membership has also beencontroversial, with some medium-sizedfirms expressing concern they will beput out of business by being unable tocompete against imports made cheaperby a reduction in customs tariffs.

The reduction of the tariffs was a keycondition for russia entering the WTOand they will fall from a current averagelevel of 9.5 percent to 7.4 percent in2013, 6.9 percent in 2014 and 6.0 per-cent in 2015.

According to the World Bank, WTOentry will bring a boost worth 3.3 per-cent of russian GDP -- or $49 billion --in the first three years after joining.Over 10 years, the gain will be worth 11

percent of GDP, it says.But Senator Sergei Lisovsky warned

this week that russia was wholly unpre-pared to compete without trade protec-tion against other world economieswhich were more used to competitionand were considerably less corrupt.

russia's journey to joining the WTOstarted back in 1993 but was marked byfrequent rows with Western partners,objections by its foes and not least asometimes lukewarm attitude on thepart of the russian leadership.

But Putin is now openly champi-oning modernisation of the economy towean the country off dependence on oiland gas exports and officials havewarned progress is not possible withoutWTO membership.

Putin signs Russia into WTO

NEW YORK

AGenCieS

Valencia sought help under an 18 billioneuro ($22.1 billion) program passed onThursday that aims to bolster regionalfinances. Spain's IBEX stock index.IBEX fell 5.8 percent, its biggest one-day drop in two years, and the risk pre-mium on government debt hit aeuro-era high as its borrowing costs roseto 7.32 percent. That is above the 7 per-cent threshold considered unsustain-able, with little relief in sight. "There isvery little to stop Spanish bond (yields)moving up at the moment, and that is abig concern," said Ed Shing, head of Eu-ropean equity strategy at Barclays.

Martin Briggs, risk advisory consult-ant for global payments company AFEXMarkets Plc in London, called the euro "aslow motion train crash that's happeningin front of our eyes. No one seems to havethe will or the ability to make the toughdecisions that need to take place."

The euro plumbed record lowsagainst the Australian, Canadian andNew Zealand currencies and hit multi-month lows against the Norwegian andSwedish crowns. Against the yen, it hitthe lowest level in more than 11 years.

The euro fell as low as $1.2143, itsweakest level against the dollar sincemid-June 2010. It last traded at$1.2160, down 1.0 percent, as a sell-offagainst sterling and the Swedish crownexacerbated the euro's slide. U.S. stockssnapped a three-day winning streakwhile stocks in Europe extended lossesafter the European Central Bank said itwould stop accepting Greek bonds ascollateral, adding to concerns about theeuro zone debt crisis. The FTSEurofirst300 .FTEU3 closed down 1.5 percent at1,048.98. Banks .SX7P and insurers.SXIP, which stand to lose on their sov-ereign bond holdings and loan books ifthe euro zone crisis intensifies, wereamong the top decliners in Europe.

Banks fell 3.7 percent and insurersslipped 1.9 percent. Spain's plight over-shadowed another round of strong U.S.corporate earnings, including better-than-expected profits at General Electric(GE.N) and strong advertising revenueat Google (GOOG.O).

"The news from Europe continues tobe a smoldering mess, and it will be along convoluted process before things areresolved there," said John Kattar, whohelps oversee $1.7 billion in assets aschief investment officer at Eastern In-vestment Advisors in Boston.

The Dow Jones industrial average.DJI ended down 120.79 points, or0.93 percent, at 12,822.57. The S&P500 Index .SPX closed down 13.85

points, or 1.01 percent, at 1,362.66. TheNasdaq Composite Index .IXIC fin-ished down 40.60 points, or 1.37 per-cent, at 2,925.30. German bond pricesand U.S. Treasuries rose as investorsclamored for safe-haven assets. Ger-man 10-year bond yields fell 5 basispoints to 1.168 percent, and the bench-mark 10-year U.S. Treasury note wasup 15/32 in price to yield 1.4584 per-cent. The U.S. dollar index .DXY rose0.7 percent to 83.476. Oil fell below$106 per barrel at one point as a firmerdollar spurred a dip from an eight-week high hit in the previous sessiondue to supply worries linked to tensionin the Middle East and hopes of an eco-nomic stimulus in the United States.

Global stocks, euro tumbleon Spain bailout fearsUS and European stocks fell and the euro hit recordlows after Spain's heavily indebted Valencia regionasked for financial aid, increasing investor fears thatthe Spanish government will seek a full-blown bailout

Super ComradePutin hits a homer!

BOI woosNorth America g Pak to sign investmenttreaties with US, Canadathis year: BOI chairman

ISLAMABAD

Online

In a major development, Pakistan wouldsign investment treaties with UnitedStates and Canada this year which will goa long way to bolster country’s export.In an interview with Online Board of In-vestment (BOI) Chairman Saleem H.Mandviwala said the signing of invest-ment treaties with United States andCanada will be an important developmentfor Pakistan which would be signed tillend December this year.“Political leadership, Bureaucracy andBusiness mafia had been creating difficul-ties in way of promoting foreign invest-ment as they did not want foreigninvestment to come into the country,” saidBOI Chairman. He said we will have to putour home in order first and there is a direneed for taking efforts to bring foreign in-vestment in the country. To a question, he said the recently passedBill of Special Economic Zone was a mile-stone in the history of Pakistan whichwould help the country to attract foreigndirect investment (FDI) and encouragelocal investors as it provides legal cover totheir investments. Chairman BOI went onto say that the establishment of SpecialEconomic Zone will attract both domesticas well as international investors. Some ofthe investor countries like Korea, Chinaand Japan were expecting to benefit fromscheme as soon as it became operational.He said provincial governments would berequested to start the process as soon asrules were framed. He further said thatthe SEZ bill will help create an industrialcluster with liberal incentives, infrastruc-ture, investor facilitation services to en-hance productivity and reduce cost ofdoing business for economic developmentand poverty reduction.“The SEZ bill also guarantees that the in-centives once granted would not be with-drawn due to conflict of interests. BOIwould now move ahead at a faster paceand through a well-planned campaign,motivating local and foreign investors toinvest in the country,” he said, addingthat it would not only help in bringingnew technologies but also provide jobs tothe people and increase our exports to re-duce the trade deficit.

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02Sunday, 22 July, 2012

BusinessFitch downgrades

Nokia credit rating,

outlook negative

PARIS

APP/AFP

International ratings agency Fitchon Friday downgraded the long-term debt of Finnish telecommuni-cations equipment maker Nokia bytwo notches from "BB+" to "BB-"and said the outlook was negative.Fitch noted in a statement that ithad said previously that it wouldtake such a move if the agency "wasnot convinced that Nokia could sta-bilise the revenue declines and becapable of generating positive singledigit operating margins in its De-vices and Services division." OnThursday, Nokia said its secondquarter net loss had more thanquadrupled on a 12-month basis to1.41 billion euros ($1.73 billion)."Fitch believes that the companydoes not have products in its cur-rent portfolio that can stem the re-cent losses," the ratings agency said.It added that "the degree of compe-tition in the industry would suggestthat it is going to be difficult to re-establish a significant presence inthe smartphone market."

Come again please?g SL seeks another IMFbailout after record loan

COLOMBO

APP/AFP

Sri Lanka on Saturday an-nounced the completion of a$2.6 billion IMF bailout, but itwas seeking fresh loans to sup-port an economy emerging fromdecades of ethnic war. The Inter-national Monetary Fund on Fri-day released the finalinstallment of the bailout agreedin July 2009; two months afterColombo defeated Tamil rebelsin a major offensive to end thedrawn-out conflict. The drawingdown the final installment of thebailout package marked thelongest engagement Sri Lankahas had with the IMF and thesingle largest facility from amultilateral institution, the Cen-tral Bank of Sri Lanka said. "SriLankan authorities now look for-ward to the continued close en-gagement with the IMF andintend to discuss the possibilityof financial support for its eco-nomic development agenda..."the bank said in a statement. Itdid not say how much Sri Lankahoped to secure from the IMF byway of fresh loans, but financeministry sources said Colombowas looking at more than $500million as a first step.

PESSI Commissioner Dr Sajid Yoosufani

during his visit to Health Management

Company, Punjab Social Security Hospital,

Manga Raiwind Road.

NEW YORK

AGenCieS

BrENT and U.S. crude futuresposted weekly gains of morethan 4 percent, both contractshaving touched eight-week

peaks on Thursday. U.S. and European eq-uities slid and the euro weakened broadlyafter Spain's heavily indebted Valencia re-gion called for aid, increasing investor fearsthat the Spanish government is moving to-ward a full-blown bailout.

"The dollar spiking higher versus theeuro on Spain banks needing help pushedoil lower. Some geopolitical fatigue seemedto emerge as well, with the rumors aboutAssad taking a deal. Looks like if he goes wewill get a selloff," said John Kilduff, partnerat Again Capital LLC in New York.

Syria's Information Ministry said com-ments by russia's ambassador to Francethat President Bashar al-Assad had ac-cepted leaving power in an orderly waywere "completely devoid of truth." Fightingraged as government troops battled rebelsat border posts and in corpse-strewnstreets in Damascus after a fourth memberof Assad's inner circle died from woundssustained in a bomb attack this week.

Brent September crude fell 97 cents tosettle at $106.83 a barrel, after falling aslow as $105.60 intraday.

Front-month Brent jumped 4.33 per-cent for the week, posting a fourth straightweekly gain and having risen 16.5 percentin the period. Expiring U.S. August crudefell $1.22 to settle at $91.44 a barrel, off itslow of $90.66. For the week, U.S. cruderose 4.98 percent. U.S. September crudefell $1.14 to settle at $91.83 a barrel.

Volumes were tepid at less than halfa million lots traded each for Brent andU.S. crude, as dealings lagged 30-day av-erages. U.S. heating oil futures fell morethan 2 cents. Gasoline managed to post again, less than a penny, keeping front-month August more than 9 cents above

the September contract. Money man-agers raised their net long U.S. crude fu-tures and options positions in the weekto July 17, the U.S. Commodity FuturesTrading Commission said. U.S. demandfor crude oil, gasoline and distillates fellin June from a year earlier, the industrygroup American Petroleum Institute saidin a report. The API attributed the dropto a slowing U.S. economy.M.E, IRAN UNCERTAINTY: Concernsabout potential supply disruptions in theMiddle East have pushed up oil prices re-cently as violence in Syria intensified and

after a Bulgarian bus bombing killed Israelitourists -- an act Israel blamed on Iran.

New York police believe Iranian revo-lutionary Guards or their proxies have beeninvolved so far this year in nine plotsagainst Israeli or Jewish targets around theworld, according to restricted police docu-ments obtained by reuters.

An Iranian lawmaker said just overhalf of Iran's parliament has backed a draftlaw to block the Strait of Hormuz shippinglane, reminding investors of the uncer-tainty involved in the West's dispute withTehran over Iran's nuclear program.

However, adding to the bearishsentiment on Friday was news thatChina will load full contracted volumesof Iranian oil in July after refinerSinopec and the National IranianTanker Co resolved a freight dispute.Chinese news also weighed on copper,another dollar-denominated commod-ity. The industrial feedstock fell morethan 2 percent on the inflamed worriesabout the euro zone that strengthenedthe U.S. currency, but also on China'swarning against relaxing curbs onproperty speculation.

Oil falls as Europe debtwoes revive economic fearOil prices fell, snapping a string of seven straight higher settlements, as the eurozone debt crisis brought economic concerns back in focus and strengthened the dollar

SINGAPORE

AGenCieS

As Europe's debt crisis drags on and the U.S. economyslows, weighing on Asia's exports, economists are cut-ting their growth forecasts for most of the economiesin the region. But they remain cautiously optimisticthat Asia would start to recover by the end of this year,even if some are skeptical about the pace at which itwould do so. "It is going to be a long hard slog back

up," said Vishnu Varathan, economist at Mizuho Cor-porate Bank in Singapore, who feels that this timearound Asia isn't going to see the V-shaped rebound itexperienced after the 2008/09 global crisis. Whencompared to previous reuters quarterly surveys, ana-lysts seem more pessimistic about Asia's ability toshield itself from the headwinds from the Europe andthe United States. "The euro zone is not doing very welland one of the key things that have changed was thatin Q1 there was quite a bit of optimism about the U.S.

economy. That has turned around quite abruptly thistime around," said Varathan.

Though the U.S. is largely expected to avoid an-other recession, the meager average growth on around2 percent economists have been forecasting for 2012will not be enough to bring the unemployment ratebelow 8 percent until next year.

With external weakness likely to persist, policy-makers in much of Asia are looking to ramp up domes-tic demand with fresh fiscal or monetary stimulus.CHINA BOTTOMING OUT

While growth in China's economy is expected toweaken to 8.0 percent this year, a level many considerthe borderline between a potentially severe slowdownand a mild one, the growth outlook for India wasslashed to 6.3 percent this fiscal year, which would bethe slowest pace in a decade.

China's economy will likely recover modestly asBeijing intensifies its policy fine-tuning to boostgrowth. Analysts predict it probably bottomed out lastquarter, when growth cooled to 7.6 percent from a yearearlier, the slowest pace in more than three years.

But the story looks much worse for India. Even asgrowth falters, the rupee has been hitting all-time lowsagainst the dollar, the government is struggling withbloated fiscal and current account deficits and inflationhas remained stubbornly high, giving policymakersless room to maneuver.

Singapore, Taiwan and South Korea, all heavily ex-posed to trade with the West, will take a hit this yearas the situation worsens in Europe. Singapore's trade-dependent economy showed a surprise contraction of1.1 percent in the second quarter after a strong Janu-ary-March in another sign that weakness in Westerncountries has begun to affect Asia.

The International Monetary Fund on Mondaytrimmed its forecast for economic growth in emerg-ing countries and warned that the outlook could dimfurther if policymakers in Europe do not act withenough force.

Asian economic powerhouses subdued, recovery to be mutedOptimism around Asia is fading with growth in its biggest economies slowingconsiderably this year, compelling central banks to keep policy accommodative for longer,though the worst of the downturn may be over, a poll showed

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